diff --git a/README.md b/README.md
index 7a2b54c..06be94f 100644
--- a/README.md
+++ b/README.md
@@ -8,6 +8,7 @@ Dumbiest HTTP proxy ever.
 * Cross-platform (Windows/Mac OS/Linux/Android (via shell)/\*BSD)
 * Zero-configuration
 * Supports CONNECT method and forwarding of HTTPS connections
+* Supports `Basic` proxy authentication
 
 ## Installation
 
@@ -25,7 +26,22 @@ go install
 
 ## Usage
 
-Just run program and it'll start accepting connections on port 8080 (default)
+Just run program and it'll start accepting connections on port 8080 (default).
+
+Example: run proxy on port 1234 with `Basic` authentication with username `admin` and password `123456`:
+
+```sh
+dumbproxy -bind-address :1234 -auth 'static://?username=admin&password=123456'
+```
+
+## Authentication
+
+Authentication parameters are passed as URI via `-auth` parameter. Scheme of URI defines authentication metnod and query parameters define parameter values for authentication provider.
+
+* `none` - no authentication. Example: `none://`. This is default.
+* `static` - basic authentication for single login and password pair. Example: `static://?username=admin&password=123456`. Parameters:
+  * `username` - login
+  * `password` - password
 
 ## Synopsis